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KING V SEBELIUS Motion for Prelim Injunction.pdf

KING V SEBELIUS Motion for Prelim Injunction.pdf

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KING V SEBELIUS Motion for Preliminary Injunction
KING V SEBELIUS Motion for Preliminary Injunction

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Published by: Competitive Enterprise Institute on Oct 25, 2013
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12/19/2013

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 1
IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF VIRGINIARICHMOND DIVISION
 DAVID KING,
et al.
,
 Plaintiffs
,
v.
KATHLEEN SEBELIUS,
et al.
,
 Defendants.
)))))))))) No. 3:13-CV-630 (JRS)
MOTION FOR PRELIMINARYINJUNCTIONMOTION FOR A PRELIMINARY INJUNCTION
Pursuant to Federal Rule of Civil Procedure 65, Plaintiffs respectfully move this Courtfor entry of an Order enjoining Defendants, pending resolution of the litigation, from applyingthe IRS regulations extending eligibility for premium assistance subsidies under the PatientProtection and Affordable Care Act to individuals who purchase health coverage throughExchanges established by the federal government pursuant to § 1321(c) of that Act.As explained in the supporting papers, Plaintiffs are very likely to succeed on the meritsof their claim that those regulations are contrary to law; they will suffer irreparable injury if  preliminary relief is not granted; and the balance of equities and public interest favor injunctiverelief. Consequently, Plaintiffs respectfully request that this Court grant the preliminary relief./s/ Jonathan BerryMichael A. Carvin (
application for admission pending 
)Walter D. Kelley Jr. (VSB No. 21622)Jacob M. Roth (
application for admission pending 
)Jonathan Berry (VSB No. 81864)JONES DAY51 Louisiana Avenue NWWashington, DC 20001Phone: (202) 879-3939
 Attorneys for Plaintiffs
 
Case 3:13-cv-00630-JRS Document 6 Filed 09/19/13 Page 1 of 14 PageID# 69
 
 1
IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF VIRGINIARICHMOND DIVISION
 DAVID KING,
et al.
,
 Plaintiffs
,
v.
KATHLEEN SEBELIUS,
et al.
,
 Defendants.
))))))))) No. 3:13-CV-630 (JRS)
BRIEF IN SUPPORT OF MOTIONFOR PRELIMINARY INJUNCTIONINTRODUCTION
The Patient Protection and Affordable Care Act (“ACA” or “the Act”) provides federalsubsidies for health coverage purchased through a marketplace established by a “State.” Thefederal government is not a “State.” Subsidies are therefore not available for coverage purchasedthrough federally established marketplaces. Yet the IRS has promulgated regulations (“the IRSRule”) declaring precisely the opposite. Those regulations, which purport to dispense billions of dollars in federal spending that Congress never authorized, are plainly contrary to law.Yet if they are not enjoined in advance of the year-end, Plaintiffs will be irreparablydeprived of their right to obtain certified exemptions from the ACA’s individual mandate for 2014. They would thus be forced either to buy comprehensive health coverage that they do notwant or risk incurring a penalty; and they would also be foreclosed from buying catastrophiccoverage for 2014. Moreover, thousands of employers are poised to eliminate or restructure their group insurance programs on the false premise that their employees are entitled to subsidies, andthe Government is poised to spend billions of unauthorized dollars that it may never be able torecover. In short, it is imperative that all affected parties know whether the IRS Rule is legallyvalid
before
it triggers billions in spending and massive behavioral changes.
Case 3:13-cv-00630-JRS Document 6 Filed 09/19/13 Page 2 of 14 PageID# 70
 
 2Plaintiffs have already filed a motion for summary judgment (Dkt. No. 5 (“SJ”)), and if the Government responds to that motion within the time permitted by the Local Rules, then therewould be sufficient time for the Court to resolve the matter well in advance of the year-end. Butin other cases challenging the IRS Rule, the Government has sought extensions, postponements,and deferrals, thereby successfully delaying adjudication of the merits. Accordingly, Plaintiffsare also moving for a preliminary injunction, but this Court need not act on it if the Governmentresponds with appropriate expedition to the pending motion for summary judgment.
STATUTORY, REGULATORY, AND FACTUAL BACKGROUNDA.
 
Congress Authorized Subsidies To Encourage States To Establish InsuranceExchanges, But Most States Nevertheless Declined.
The Patient Protection and Affordable Care Act (“ACA” or “the Act”) regulates theindividual health insurance market primarily through insurance “Exchanges” organized alongstate lines. Congress determined that it would be preferable for the states themselves to establishand operate these Exchanges. Accordingly, the Act provides that “[e]ach State shall … establishan American Health Benefit Exchange … for the State ….” ACA, § 1311(b)(1).The federal government cannot, however, constitutionally
compel 
sovereign states tocreate Exchanges. The Act therefore recognizes that some states may decline or fail to do so.
See
ACA, § 1321(b)-(c). Section 1321 of the Act therefore authorizes the federal government toestablish fallback Exchanges in states that do not establish their own.
See
ACA, § 1321(c). TheACA thus provides for two basic types of Exchanges: those established by states under § 1311,and those established by the federal government under the § 1321 fallback.To encourage states to establish Exchanges, the Act authorizes premium assistancesubsides for state residents who purchase health coverage through state-established Exchanges.These subsidies are available only to those who enroll in coverage “through an Exchange
Case 3:13-cv-00630-JRS Document 6 Filed 09/19/13 Page 3 of 14 PageID# 71

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